2
Second Quarter 2013
31
28
40
28
32
29
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
53
42
48
29
47
46
45
30
45
43
52
59
51
74
2010
2011
2012
2013
Q1 Q2 Q3 Q4
Quarterly Aerospace Transaction Activity
M&A Analysis
TMG tracked 30 announced Defense and Government Services sector
transactions and 31 announced Aerospace sector transactions during
Q2 2013. Transaction activity in the Defense and Government
Services sector remains sluggish compared to prior years’ second
quarters. The M&A “hangover” experienced after a strong Q4 2012
continued into Q2 2013 and along with ongoing market uncertainty
dampened deal volume vs. prior quarters. However, signs of increased
activity began to surface in late Q2 2013. The number of announced
transactions increased monthly throughout the quarter with June
accounting for nearly double the announced transaction activity as
April (13 vs. 7). The tail end of Q2 2013 also saw increased M&A
activity from large primes, such as Raytheon and Ultra Electronics,
who had remained on the sidelines up until that point. During Q2 2013,
financial buyers accounted for 33% of Defense and Government
Services M&A activity vs. 38% in Q1.
Aerospace transactions in Q2 2013 were consistent with previous
quarters (not including Q4 2012) and occurred steadily throughout the
quarter. There were eight divestitures in Q2 2013 (26% of total
transaction activity). TransDigm continued its strong M&A activity with
three more acquisitions worth a combined $475 million, including a
$286 million purchase of Arkwin Industries. TransDigm spent $785
million in 2012 on its purchases of Amsafe and Aero-Instruments.
Arlington Capital’s newly acquired platform company, MB Aerospace,
made its first acquisition in June, purchasing aero-engine component
manufacturer Delta Industries for an undisclosed amount. In July,
Precision Castparts turned heads with its $600 million all-cash
purchase of Permaswage, a French designer and manufacturer of
aerospace fluid fittings. Notable transactions in the composite arena
included Triumph Group acquiring Primus Composites from Precision
Castparts and Rolls Royce acquiring Hyper-Therm HTC.
Defense and Government Services Transaction Activity
Source: InfoBase; Capital IQ as of 06/28/13
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